PMP holds cost-saving target well in sight

Australia's largest commercial publisher, PMP, is on track to achieve its target of $30 million in cost savings for this financial year.

PMP yesterday reported a net profit for the six months to December 31 of $19.99 million, down from $29.55 million in the previous corresponding period. The result included a $7.6 million restructuring charge, while the 2002-03 net profit result contained a $13.4 million one-off gain from asset sales.

The company said stronger operational efficiency combined with lower interest payments and tax costs had increased its net profit before significant items to $27.6 million, a 71.4 per cent improvement on a year earlier.

PMP chief executive David Kirk said additional restructuring required in the business, particularly in PMP Digital, would increase its significant items guidance from $11 million to $18 million in 2003-04.

"This increase in significant items will affect our net debt target, which will increase from below $215 million to below $222 million," he said.

Mr Kirk also said he was comfortable with the lower end of market consensus for earnings before interest, tax amortisation and depreciation (EBIT) of $70-$76 million for the year, before significant items.

Cost savings helped PMP Digital more than double EBIT to $3.3 million. Restructuring is expected to result in additional significant items being incurred in 2003-04. Mr Kirk said job losses at the company so far this financial year were 437.

Riddled by debt in recent times, the company in the past two years has bailed out of Australian magazine publishing, selling its Pacific Publications joint venture to the Seven Network and selling its British magazine division.

PMP will not pay a dividend. Its shares closed down 15¢ at $1.26 yesterday.